More ‘Fat Leonard’ fallout: Admiral and 8 other officers indicted in fraud and bribery scheme

Retired U.S. Navy Rear Admiral Bruce Loveless and eight other high-ranking Navy officers have been charged in a federal indictment with accepting luxury travel, elaborate dinners and services of prostitutes from foreign defense contractor Leonard Francis, the former Chief Executive Officer (CEO) of Glenn Defense Marine Asia (GDMA), in exchange for classified and internal U.S. Navy information.

The Justice Department’s Criminal Division, the Defense Criminal Investigative Service (DCIS), and the Naval Criminal Investigative Service (NCIS) made the announcement yesterday (Mar. 14, 2017). This action is the latest in a string of guilty pleas, indictments and convictions – spanning more than three years – related to alleged fraudulent activities of GDMA and its chief executive, Leonard Glenn “Fat Leonard” Francis.

To date, a total of 25 named individuals have been charged in connection with the corruption and fraud investigation into GDMA, a defense-contracting firm based in Singapore. Of those charged, 20 are current or former U.S. Navy officials and five are GDMA executives. So far, 13 have pleaded guilty while several other cases are pending.

Francis’ reputation for corruption and bribery in recent years has led him to be nicknamed “Fat Leonard.” (For background, see The Washington Post article, “The Man Who Seduced the 7th Fleet,” here.)

The allegations contained in the latest indictments expose flagrant corruption among several senior officers previously assigned to the U.S. Navy’s Seventh Fleet. Nine defendants were arrested yesterday on various charges including bribery, conspiracy to commit bribery, honest services fraud, obstruction of justice and making false statements to federal investigators when confronted about their actions.

According to the indictment, the Navy officers allegedly participated in a bribery scheme with “Fat” Leonard Francis, in which the officers accepted travel and entertainment expenses, the services of prostitutes and lavish gifts in exchange for helping to steep lucrative contracts to Francis and GDMA – and to sabotage competing defense contractors. The defendants allegedly violated many of their sworn official naval duties, including duties related to the handling of classified information and duties related to the identification and reporting of foreign intelligence threats. According to the indictment, the defendants allegedly worked in concert to recruit new members for the conspiracy, and to keep the conspiracy secret by using fake names and foreign email service providers. According to the indictment, the bribery scheme allegedly cost the Navy – and U.S. taxpayers – tens of millions of dollars.